UPS takes a stake in Chinese self-driving truck start-up TuSimple as driverless deliveries zoom into view

Minghe Hu

Multinational package delivery company UPS has taken a minority stake in TuSimple, a Chinese self-driving truck start-up backed by Nvidia and Chinese technology company Sina, to help bring its autonomous technology to market.

TuSimple announced the deal on Thursday but declined to disclose the size of the investment. The two companies have been collaborating on the development and testing of self-driving, tractor-trailers between Phoenix and Tucson in Arizona since May.

“We are honoured by UPS’s strategic investment and their vote of confidence in TuSimple, this proves their commitment to staying at the forefront of innovation,” said TuSimple’s founder, president and chief technology office Xiaodi Hou, in a press release. “TuSimple is confident that it can accelerate bringing the first self-driving truck to market to increase road safety.”

Amid a booming e-commerce market the US is facing a lack of qualified drivers and delivery-men. In 2018, the US trucking industry was short of roughly 60,800 drivers, up nearly 20 per cent from 2017’s figure of 50,700, according to trade body American Trucking Associations. The deal also comes as the US and China are duking it out for supremacy in a range of new AI technologies, such as autonomous driving, smart city infrastructure and next generation mobile networks.

Autonomous trucks could potentially double the productivity of long–haul trucks, and reduce fuel costs, according to a study by UC Berkeley’s Labor Center in 2018. Use of autonomous trucks could save the haulage industry around $168 billion annually, according to Morgan Stanley. UPS said in its press release that TuSimple could also save companies 30 per cent in transport costs by reducing the need to rent third-party trucks.

Didi follows Google with plan to set up independent self-driving unit

The Chinese self-driving truck start-up announced in February that it had raised US$95 million in a funding round led by Sina, giving the unicorn a valuation of around US$1 billion. Among the major Chinese technology companies working on self-driving vehicles, internet search engine operator Baidu has been investing the most aggressively, while forging key industry alliances.

In May, the United States Postal Service also teamed up with TuSimple to deliver mail as part of a two-week trial between Phoenix and Dallas using the Chinese company’s next-generation mail delivery truck.

Self-driving trucks are expected to make it to market quicker than self-driving cars, as the latter will operate mainly in congested urban areas whereas trucks spend a lot of time on highways, where there are fewer pedestrians and therefore reduced safety concerns, according to the same study by UC Berkeley Labor Center.

Earlier this year, two Tesla drivers were killed in accidents while the e-vehicle’s automated driving system was being used, raising public safety concerns.

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